News Cedar Fair Merges with Six Flags

[Fiender]

Can I get next weekends lottery numbers?

I'm sorry but I'm always a little mystified in being able to talk with such confidence that closing seriously underperforming locations is not a good move. Like I know as park fans we're always going to lament the loss of a park, but at the end of they day these parks are about making money and if one is basically breaking even or close to it, and there's a bigger more profitable park within it's scope then it makes sense to close the one that's not making as large of a profit and work to grow the geographical footprint of the bigger park.

There's not many places I'm looking at this impact for BTW. SFDL and CW are two parks you need to consider this with. Then SFNE, SFGE, La Ronde - and do you want to move off one of these parks and not cannibalize yourself. Last there's the KD, SFA, Dorney, SFGAdv quad of not all of them should come out of this unharmed.

Wonderland and Darien Lake are separated by a country border. When I was trying to get a group of friends together to hit CW (Rochester NY local here) I was surprised how few of my friends had enhanced licenses or passports. Geographic closeness does not mean overlapping markets. Same with most of those other parks you mentioned. Just because someone who lives near both parks could visit one or the other, doesn't mean they will. But this also offers an opportunity for the new chain; Dorney locals might be more likely to buy a more expensive pass if it also got them into SFGAdv, for instance.

And no one wants to say that closing parks is a good thing. That's just a fact of this hobby. But I think it's worth noting a couple of things:
1) We seldom know which parks are actually "underperforming". Both Darien Lake and Michigan's Adventure reportedly make solid bank compared to their running costs, and neither park is likely to go anywhere despite not being likely to receive major investments.

2) I personally believe that some underperforming parks could be turned around and improved, but that would require investment, better management, and patience. A merged company with so many properties and so much debt isn't likely to bother with that. That's not a good thing for us, for the locals, or the industry as a whole. Closing these parks would only benefit the shareholders.

 

[warfelg]

@Fiender i get what you are saying and I always catch heat for saying this but - it’s a business at the end of the day.

Keeping a park open because of the population that doesn’t have the ability to cross a boarder or people who may not travel the 90-120 minutes is not a sound decision. If closing some parks in 5-10 years ensures the 40-75 year health of the company as a whole then they should do it.

Now - I’ll preface this with it’s my belief - but if these parks were so healthy there likely wouldn’t be the notion of merging. This new merged company is 35 (iirc) combined gates. Yes I know some of them are strictly water parks (Hurricane Harbors and Schlitterbons) but that’s quite the property to have to manage. Again, my belief, but part of what makes parks great - is the scarcity component. It’s being an event. Personally I don’t want to roll out of bed and be 20 minutes from a small experience (SFA) then 3/4 2-2.5 hour drives all being similar experiences (Dorney/SFGAdv/KD). I know you can say they all have different rides and that’s why you go to them all but if I have a bad experience at one, there’s a good chance I don’t go to any.

 

[mtorange]

Am I the only one who is cautiously optimistic about the merger? I hope the deal can bring some needed funding to parks like KD at a time where they’re clearly making major cuts.

 

[warfelg]

Am I the only one who is cautiously optimistic about the merger? I hope the deal can bring some needed funding to parks like KD at a time where they’re clearly making major cuts.

No. Because this is mostly where I’m at. I think it can be good if the merger means that they can look at small parks who struggle and sell them off/shutter them to redirect those funds to parks who have the room for growth then it’s good for them in the long run.

A thought I’ve been kicking: like if it means KD and SFGAdv have more growth by selling Dorney to someone like Merlin and taking SFA to a water park with a few rides, I would take that over continued minimal investment in all 4 parks with SFGAdv betting more.

 

[Riboflavenus]

Can I get next weekends lottery numbers?

I'm sorry but I'm always a little mystified in being able to talk with such confidence that closing seriously underperforming locations is not a good move. Like I know as park fans we're always going to lament the loss of a park, but at the end of they day these parks are about making money and if one is basically breaking even or close to it, and there's a bigger more profitable park within it's scope then it makes sense to close the one that's not making as large of a profit and work to grow the geographical footprint of the bigger park.

There's not many places I'm looking at this impact for BTW. SFDL and CW are two parks you need to consider this with. Then SFNE, SFGE, La Ronde - and do you want to move off one of these parks and not cannibalize yourself. Last there's the KD, SFA, Dorney, SFGAdv quad of not all of them should come out of this unharmed.

I'm trying to think of the last time a large merger like this worked out in the positive for consumers. It almost never happens. Now the pool of resources will be stretched thinner. This isn't going to go well for small-to-mid-sized parks. I'll be happy to admit I was wrong. But I very much doubt I am.

 

[Zachary]

I hope the deal can bring some needed funding to parks like KD at a time where they’re clearly making major cuts.

The exact opposite will happen—especially at a park like Kings Dominion.

The new Six Flags chain is now overflowing with far better investment opportunities than many of the mid-tier Cedar Fair properties and many of those better investment opportunities need a lot of cash—even to just bring them up to current Cedar Fair standards. Expect money to be syphoned from the likes of Kings Dominion, Dorney, Worlds of Fun, etc. in the years ahead to finance improvements at parks with much higher ceilings like Magic Mountain, Great Adventure, Over Georgia, etc. New Six Flags will be all about turning those properties into Cedar Point/Carowinds-style money printers. Maybe years down the line when those parks are (hopefully) stabilized, investment can return to the smaller properties again.

Also, unrelated, but I have said this before and will reiterate it again: A chain the size of new Six Flags does not want to sell parks as parks. They don't want competition. If a park isn't worth the chain's trouble anymore, it is vastly more beneficial for new Six Flags to gut the property and sell it to a non-park land developer. New Six Flags will not want to sell arms to their enemies—especially in markets they already have a foothold in.

 

[Fiender]

i get what you are saying and I always catch heat for saying this but - it’s a business at the end of the day.

Keeping a park open because of the population that doesn’t have the ability to cross a boarder or people who may not travel the 90-120 minutes is not a sound decision. If closing some parks in 5-10 years ensures the 40-75 year health of the company as a whole then they should do it.

Now - I’ll preface this with it’s my belief - but if these parks were so healthy there likely wouldn’t be the notion of merging. This new merged company is 35 (iirc) combined gates. Yes I know some of them are strictly water parks (Hurricane Harbors and Schlitterbons) but that’s quite the property to have to manage. Again, my belief, but part of what makes parks great - is the scarcity component. It’s being an event. Personally I don’t want to roll out of bed and be 20 minutes from a small experience (SFA) then 3/4 2-2.5 hour drives all being similar experiences (Dorney/SFGAdv/KD). I know you can say they all have different rides and that’s why you go to them all but if I have a bad experience at one, there’s a good chance I don’t go to any.

Keeping a park open to cater to a population they wouldn't otherwise be catering to, or to utilize that smaller park (DL, MA, Dorney) as a gateway to other, more protiftable parks, does make sense, imo.

It's also worth noting that, just because a company does something, doesn't mean that it's good business. Six Flags has a portfolio of baffling decisions that ended them up where they are now, and Cedar Fair has their share of skeletons in the closet. Now, most of my opinions on corporations and CEOs have been warped by the video game industry, which I follow closely. A studio can make a successful, lauded game, and then be shuddered because the publisher paying their wages wants to post lower costs next quarter.

Vastly different industries. I get that. But we're already seeing lots of changes and cuts that suggest they're dominated by the same mindset.

 

[mtorange]

The exact opposite will happen—especially at a park like Kings Dominion.

The new Six Flags chain is now overflowing with far better investment opportunities than many of the mid-tier Cedar Fair properties and many of those better investment opportunities need a lot of cash—even to just bring them up to current Cedar Fair standards. Expect money to be syphoned from the likes of Kings Dominion, Dorney, Worlds of Fun, etc. in the years ahead to finance improvements at parks with much higher ceilings like Magic Mountain, Great Adventure, Over Georgia, etc. New Six Flags will be all about turning those properties into Cedar Point/Carowinds-style money printers. Maybe years down the line when those parks are (hopefully) stabilized, investment can return to the smaller properties again.

Also, unrelated, but I have said this before and will reiterate it again: A chain the size of new Six Flags does not want to sell parks as parks. They don't want competition. If a park isn't worth the chain's trouble anymore, it is vastly more beneficial for new Six Flags to gut the property and sell it to a non-park land developer. New Six Flags will not want to sell arms to their enemies—especially in markets they already have a foothold in.

Ah… I’ll take your word on that but I hope for everyone’s sake that the situation won’t be as bleak as this. Thanks for the input.

 

[warfelg]

Keeping a park open to cater to a population they wouldn't otherwise be catering to, or to utilize that smaller park (DL, MA, Dorney) as a gateway to other, more protiftable parks, does make sense, imo.

It's also worth noting that, just because a company does something, doesn't mean that it's good business. Six Flags has a portfolio of baffling decisions that ended them up where they are now, and Cedar Fair has their share of skeletons in the closet. Now, most of my opinions on corporations and CEOs have been warped by the video game industry, which I follow closely. A studio can make a successful, lauded game, and then be shuddered because the publisher paying their wages wants to post lower costs next quarter.

Vastly different industries. I get that. But we're already seeing lots of changes and cuts that suggest they're dominated by the same mindset.

So I can tell you in the golf industry we’ve seen similar to what is happening here with the parks. There’s management companies that have merged before and what I’m saying is exactly what ended up happening. They saw they ended up with 4-5 courses in the same town. After about 4 years they end up getting rid of 2-3 of the courses.

Because there’s logic in saying “oh this will be a feeder” but it doesn’t really work that way. Generally the people who stay at the ‘cheaper’ ones stay at that ‘cheaper’ or local one. Especially if they end up going under one umbrella name, more people would say that a Six Flags is a Six Flags. Again that’s one that we’ve seen in the golf industry. Either people gravitate to the cheaper options because they are seen as better ‘value’ or they end up at the pricier one because of the prestige.

FWIW my reference is that I’ve worked at one of these courses when two management companies merged, we were one that was seen as a good “feeder” course and none of our membership moved because of the ‘value’, but they took the money we made to support the ‘better’ products to improve them then eventually sold us because we were breaking even at best. This all happened in a 2 year span.

To add in there’s the part @Zachary said about investing in the parks. With so many parks (like I said 35 gates) to fund improvements to, there’s likely going to be some that need to “unload” (whether it be sale of the land or the park) those assets to keep the ‘important’ parks profitable.

And here’s what I’ll say where I get into the disagree with you. I don’t think having more options is better for the consumer because beyond the investments in rides being spread thinner, so is F&B, entertainment, maintenance, and each park. If they reduce those parks that and have less parks where they can focus those efforts on they can make those parks much better for the consumer. Instead of money needing to “subsidize” the smaller parks it can continue to go back into the bigger parks.

 

[horsesboy]

Am I the only one who is cautiously optimistic about the merger? I hope the deal can bring some needed funding to parks like KD at a time where they’re clearly making major cuts.

Yeah it's not going to happen. The merger just dumped a ton of combined debt on the company. As well as several heavily neglected parks. And on top of that it means that the company now owns all the parks that are competing for the DC metro crowd. KD just went further down the back burner. I am fully serious when I say that I don't expect another significant investment till some time in the 30s.

 

[warfelg]

Yeah it's not going to happen. The merger just dumped a ton of combined debt on the company. As well as several heavily neglected parks. And on top of that it means that the company now owns all the parks that are competing for the DC metro crowd. KD just went further down the back burner. I am fully serious when I say that I don't expect another significant investment till some time in the 30s.

I forgot what the webpage name is but someone created a map with all the SF/CF parks plotted out and the NE is really packed.

Using Philly as a starting point and doing a 500 mile radius (why 500? I dunno, round number and that’s roughly how many miles of road to get from there to the outer banks) you would would have KI, CP, Caro, KD, SFA, Dorney, SFGAdv, SFDL, SFNE, le Gra, CW, SFGE. That’s like 34% of their portfolio in a 500 mile radius of the Mid-Atlantic?

 

[Fiender]

So I can tell you in the golf industry we’ve seen similar to what is happening here with the parks. There’s management companies that have merged before and what I’m saying is exactly what ended up happening. They saw they ended up with 4-5 courses in the same town. After about 4 years they end up getting rid of 2-3 of the courses.

Because there’s logic in saying “oh this will be a feeder” but it doesn’t really work that way. Generally the people who stay at the ‘cheaper’ ones stay at that ‘cheaper’ or local one. Especially if they end up going under one umbrella name, more people would say that a Six Flags is a Six Flags. Again that’s one that we’ve seen in the golf industry. Either people gravitate to the cheaper options because they are seen as better ‘value’ or they end up at the pricier one because of the prestige.

FWIW my reference is that I’ve worked at one of these courses when two management companies merged, we were one that was seen as a good “feeder” course and none of our membership moved because of the ‘value’, but they took the money we made to support the ‘better’ products to improve them then eventually sold us because we were breaking even at best. This all happened in a 2 year span.

To add in there’s the part @Zachary said about investing in the parks. With so many parks (like I said 35 gates) to fund improvements to, there’s likely going to be some that need to “unload” (whether it be sale of the land or the park) those assets to keep the ‘important’ parks profitable.

And here’s what I’ll say where I get into the disagree with you. I don’t think having more options is better for the consumer because beyond the investments in rides being spread thinner, so is F&B, entertainment, maintenance, and each park. If they reduce those parks that and have less parks where they can focus those efforts on they can make those parks much better for the consumer. Instead of money needing to “subsidize” the smaller parks it can continue to go back into the bigger parks.

For me, what it comes down to is, I don't trust the chain to make these kinds of decisions. If they invest less into their parks, add fewer new rides, cut back on live entertainment, or God forbid close some parks, was it really the best possible option for the chain's longevity, or because they need a spreadsheet to look good for the shareholders this month? I feel there's a difference between making hard, savvy business decisions, and unregulated greed. One is sometimes worthy of praise and the other is not. It's just difficult to tell, as a consumer, which is which.

 

[warfelg]

For me, what it comes down to is, I don't trust the chain to make these kinds of decisions. If they invest less into their parks, add fewer new rides, cut back on live entertainment, or God forbid close some parks, was it really the best possible option for the chain's longevity, or because they need a spreadsheet to look good for the shareholders this month? I feel there's a difference between making hard, savvy business decisions, and unregulated greed. One is sometimes worthy of praise and the other is not. It's just difficult to tell, as a consumer, which is which.

Well I got to say I think your lumping a lot of nuanced conversation into a single statement there.

Investing less into the parks I would agree is greed. As would be cutting live entertainment because that’s something that has no direct revenue stream to start with.

Adding fewer rides could go either way. It could be greed if the park is making money hand over fist without adding anything prior and they wait for the crash of people coming in to try to do anything. It could also be savvy business to say that having less rides added allowed them to put capital investment at other spots to improve the park experience.

As for the closing some parks, I would say it’s likely going to end up a savvy business decision. Back to my OP on this topic, I said close the parks that are underperforming. If they need to cur a park that’s getting “subsidized” by another park then why should they keep it around. If you managed 10 retail stores that were in a 50 mile radius and 4 of them weren’t making money you would close them so quickly. They won’t be in the business of closing ones that make money just to close them.

 

[bradd1319]

I know it's unknown at this time bit I just don't get the thought their going to possibly invest a large amount of money into SFA. The amount of people in the metro area hasn't changed and SF decided it wasn't worth it for years.

 

[guy305]

My completely selfish ideal scenario would be scrap SFA, disperse its rides around and sell the valuable land. That would relieve a good chunk of their debt and allow some smaller parks in the chain to get something new with little overhead. Realistically I never want to see a park close but their last reported attendance numbers are 1,180,000 in 2005 which was abysmal for the time. KD reportedly had 2,180,000 in 2004.

Scrapping its assets is guaranteed money now, while investing heavily into the park is nowhere close to a guaranteed return. If it had to be one I think I know which is more likely to happen.

 

[GAcoaster]

I remember when Cedar Fair purchased the Paramount Parks and there was a lot of doom and gloom in the enthusiast community at that time. There were growing pains and changes, but overall it worked out for the better for the former Paramount Parks and the Cedar Fair parks. I think the same thing will happen here-- some positive changes, some negative changes, but in the long run I think they will all do well. There are some big cost savings with the merger and the economy of scale for purchasing from vendors-- rides, food, etc..

There will also be a change in strategy for some locations where once they competed and now they become complimentary. I think pass sales will increase for multi-park passes since there will be so many more places to used them. If I lived close to somewhere like Dorney I would have no incentive to buy a $300 pass good for all parks unless I knew I could make a trip to Ohio or some other market where I could use it. Now there's a huge market that visits both Dorney and Great Adventure that could easily see the value in spending the extra money. I'd imagine Knott's and SFMM, SFDK and CGA, SFA and KD, even Carrowinds and SFOG could all see bumps in pass sales with relatively close parks that create the value proposition.

I think it's possible we see them sell off or terminate leases (Frontier City, Darrien Lake) if they don't see them as being profitable. I assume United Parks is still interested in expansion through acquisition, so who knows-- we could see parks subtracted from one and added to another. I also assume that Great America is still closing and we will see distribution of some attractions from there, but I think we may see more things being sent from big parks to smaller parks as hand me downs for a cost savings with bigger parks seeing bigger new additions on a regular basis.

 

[b.mac]

The exact opposite will happen—especially at a park like Kings Dominion.

The new Six Flags chain is now overflowing with far better investment opportunities than many of the mid-tier Cedar Fair properties and many of those better investment opportunities need a lot of cash—even to just bring them up to current Cedar Fair standards. Expect money to be syphoned from the likes of Kings Dominion, Dorney, Worlds of Fun, etc. in the years ahead to finance improvements at parks with much higher ceilings like Magic Mountain, Great Adventure, Over Georgia, etc. New Six Flags will be all about turning those properties into Cedar Point/Carowinds-style money printers. Maybe years down the line when those parks are (hopefully) stabilized, investment can return to the smaller properties again.

Also, unrelated, but I have said this before and will reiterate it again: A chain the size of new Six Flags does not want to sell parks as parks. They don't want competition. If a park isn't worth the chain's trouble anymore, it is vastly more beneficial for new Six Flags to gut the property and sell it to a non-park land developer. New Six Flags will not want to sell arms to their enemies—especially in markets they already have a foothold in.

A lot of the parks I personally think SF/CF will "sell off" are the ones that they don't own outright, and instead have an operating agreement on. Six Flags currently operates 6 properties that are owned by EPR and a 7th that's owned by the city of Rockford, IL. California's Great America is also a ??? right now so there's 8 potential properties to cut the fat with and going from 33 gates to 25-26 will be much more sustainable for them with so many highly profitable parks under one roof.

 

[Thriller]

I bet there won't be a huge initial adjustment. A "boil the frog" situation will likely happen overtime, but frankly, Cedar Fair passes are already notably undervalued in my opinion so rising pass prices won't bother me too much.

I'm far more concerned about the quality of the park experience which, to be clear, I expect to degrade notably in the years ahead at many existing Cedar Fair properties. In my estimation, the expenditures needed to make the current Six Flags parks functional again is just too great for it not to massively detract from the budgets of Cedar Fair's parks.

A more expensive combined Six Flags pass getting you access to parks that are, on average, at the midpoint in quality between current Six Flags and current Cedar Fair is the problem in my mind—because the midpoint between those two things is not great.

Exactly. The quality-ish parks will suffer by association with the trashy Six Flags parks that need major improvements to just be decent.

 

[CoasterRattler🐍]

Happy Last Day of Cedar Fair!

 

[horsesboy]

Dear Six Flags' new management. I am writing to inform you that as a consumer my Six Flag Gold Plus pass lists it's self as valid for admission at any Six Flags park for another 76 years. I fully expect you to continue to honor this expiration date at it's listed $5.99 a month price